PetFoodDirect Thrives in Dog-Eat-Dog Online World

While most of its competitors have struggled in the competitive online pet supplies market, PetFoodDirect.com has flourished this year using traditional direct marketing strategies.

Targeting affluent pet owners who live on the East Coast from Maine to Georgia, PetFoodDirect recorded a 12 percent click-through-to-order rate via its Web site in April, representing a 5 percent increase from January, when the company started its major marketing campaign.

Through the use of direct mail, e-mail, catalogs and other marketing efforts, PetFoodDirect, Montgomeryville, PA, has averted the recent plunge that other online pet supply distributors have experienced.

Though PetFoodDirect declined to provide sales figures, Walker said the company generated a revenue increase of at least 30 percent each month since January. The company used its first round of financing, $10 million, to research one market -- the East Coast, or the "I-95 strip," as Roska called it. The research indicated that the region is home to 25 percent of the nation's pet owners.

"Because of the population skews, we wanted to build a scalable model in the East Coast first, then replicate it in different regions when the time is right," Walker said.

The East Coast also fit the income bracket PetFoodDirect sought -- at least $50,000 per year.

PetFoodDirect acted on the research by launching a direct response campaign. It developed its database, sent targeted direct mail and e-mailed its customer base. The company then built its Web site.

PetFoodDirect plans to target the Southeast region next.

"Find the population and the money, and you'll find your market," Roska said. "We're already getting a large number of orders from Florida, and we haven't even marketed there yet."

Roska reported that the second round of financing -- an undisclosed amount -- is already being negotiated.

"Our premise is to match-spend against the big guys," he said. "We have to out-market them."

PetFoodDirect's competition has targeted the West Coast, according to Walker. "Let them have it," he said. Walker said that for his Pennsylvania-based company, the shipping costs are far lower on the East Coast.

PetFoodDirect's Web site features a section called the PetCenter, in which veterinarians answer customers' e-mail.

"We're not interested in the casual pet owner," Walker said. "We're looking for families with a committed interest in their pets. [That includes] families that treat their pets like family members, like sons, like daughters."